Quote:
Originally Posted by pip08456
Ok so automation puts people out of work, this reduces the amount of disposable income.
Companies can only make profits if people have the disposable to purchase the companies goods.
The more that is automated the less disposable income there will be.
So how's that going to generate wealth?
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Logically it can't can it
The wealth is generated by other means, here's a very simple and very basic example:
If you can only afford to pay £50 for an 'item' instead of £80 then you can't buy it, which means a loss to the manufacturer unless he reduces the manufacturing costs to allow operating profit.
You can reduce costs by lowering the quality of component parts, or by reducing the staff. Reducing staff leads to a scenario like yours, but reducing quality leads to a shorter 'lifetime' of the item, which means you buy it once every year instead of every 2 years, and therefore the manufacturer has to double his output. Which also means the suppliers of component parts have to increase theirs too.
Doubling production by using machines leads to a reduction of staff levels (costs), but they have to cover the cost of those machines by ensuring they can sell the product they manufacture . . and here's the good bit.
Advertising. All those people put out of work by machines are now employed in the large (and ever growing) industry of advertising. Take a look around yourselves today, adverts in many varied formats are forever being pushed into your daily life . . . and we're paying them for it
. . . oh, gotta go, the phone is ringing again
